SMM Daily Review - 2012/6/7 Base Metals Market

SMM Insight 10:17:56AM Jun 08, 2012 Source:SMM

SHANGHAI, Jun. 8 (SMM) –

Copper
The most active SHFE copper contract for September delivery started RMB 380/mt higher at RMB 54,060/mt Thursday. The contract hovered narrowly between RMB 54,000-54,300/mt in the morning as longs and shorts competed severely, with a high at RMB 54,260/mt. However, as the Shanghai Composite Index lost 2,300 again in the afternoon, and as LME copper slipped swiftly to test USD 7,400/mt, SHFE 1209 copper contract moved lower gradually, retreating below the daily moving average. Reversing early gains, the most active copper contract finally ended at an intraday low of RMB 53,640/mt, down RMB 40/mt or 0.07%, with trading volumes and positions decreasing by 112,000 lots and 8,190 lots, respectively. The turnover rate for SHFE 1209 copper contract reached as high as 145% amid growing divergence between longs and shorts. SHFE copper prices found weak support at their 5-day moving average.

SHFE copper prices met resistance to rebound. Imported copper supply in spot markets continued to increase, keeping overall copper supply sufficient. Spot copper premiums were thus quoted between positive RMB 220-280/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,030-55,090/mt, and RMB 55,050-55,150/mt for high-quality copper. Traders chose opportunities to enter market in the morning, and some downstream producers also continued to buy at the lows. Near the midday, copper prices edged down, but spot copper market transactions were restricted. Transaction volumes on the spot copper market thus fell after initially rising. In the afternoon, SHFE copper prices slid rapidly by nearly RMB 400/mt, but actual consumption in spot markets was limited amid growing bearish sentiment, causing copper premium quotes to only rise marginally to positive RMB 240-320/mt. Nevertheless, traded prices dropped to RMB 54,750-55,050/mt in the afternoon, basically losing the RMB 55,000/mt point.  

Aluminum
The most active SHFE aluminum contract for September delivery started at the previous-day closing price of RMB 15,900/mt and slipped with other base metals to settle down a slight RMB 10/mt or 0.06% at RMB 15,890/mt on Thursday, after temporarily hitting the intraday high of RMB 15,960/mt. Positions dropped 334 lots to 100,742 lots. The Shanghai Composite Index lost the 2,300 mark, fostering a strong bearish market sentiment. The contract gradually slipped to fix the gap early in the week, indicating the downward trend will continue. SMM expects a struggle at RMB 15,900/mt in the near term.

Spot aluminum was traded at RMB 15,930-15,950/mt in Shanghai, with low-iron aluminum trading at RMB 16,020-16,040/mt. The current-month contract climbed slightly but spot market confidence was still weak. Downstream buying stayed limited while goods holders expressed high interest for goods movements, leading to wider discounts. Supply was still excessive and overall deals stayed light.

Lead
On Thursday, SHFE lead prices opened RMB 75/mt higher at RMB 15,120/mt and moved around RMB 15,105/mt since Chief of ECB and officials of the Fed expressed intention of adopting further stimulus policies. In the afternoon, SHFE lead prices were under downward pressures due to rally of the US dollar index but gained strong support at the 5-day moving average to close at RMB 15,030/mt. Trading volumes fell by 76 lots to 76 lots, while positions were up 14 lots to 2,142 lots.

On Thursday, although traders lowered prices, domestic lead market was quiet due to weak demand. Well-known brands such as Nanfang were initially quoted at RMB 15,160/mt, with premiums of RMB 50/mt over the most active SHFE lead price. Later, quotations fell by RMB 10/mt. Hanjiang was quoted at RMB 15,120/mt, while offers for Shenqian was at RMB 15,020/mt.

Zinc
On Thursday, SHFE 1209 zinc contract prices opened higher at RMB 14,860/mt and fluctuated in a narrow band between RMB 20-30/mt. In the afternoon, SHFE 1209 zinc contract prices plunged to an intraday low at RMB 14,715/mt due to falling Shanghai Composite Index, and finally closed at RMB 14,720/mt, down RMB 55/mt. Trading volumes decreased by 16,292 lots to 85,590 lots, and total position decreased by 3,040 lots to 173,766 lots.

In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices expanded to RMB 70-100/mt, with traded prices between RMB 14,750-14,760/mt. #1 zinc was quoted between RMB 14,710-14,740/mt. Spot prices remained unchanged at noon despite falling SHFE zinc prices. Smelters increased goods supply as zinc prices had been rising for two days, while downstream buying interest was low, keeping transactions modest.

Tin
On Thursday, China’s spot tin market was boosted by the rises in LME tin prices seen on Wednesday. Mainstream traded prices were between RMB 151,500-153,000/mt in Shanghai tin market. Transactions remained quiet with a few purchases made by downstream buyers. Main transactions for Nanshan, Yunxiang and Yunshan were made around RMB 151,500/mt, while Yunxi was mainly traded between RMB 152,000-153,000/mt. Demand in spot market was still sluggish and smelters sell goods in limited amounts.

Nickel
On Thursday, mainstream prices of Jinchuan nickel were between RMB 122,000-122,200/mt, while mainstream Russian nickel prices were between RMB 118,500-118,700/mt. In the midday, Russian nickel prices slid to RMB 118,200-118,500/mt, while Jinchuan nickel prices did not fluctuate significantly. Spot nickel prices continued to fall in the afternoon, dragged down by LME nickel prices. Mainstream prices of Jinchuan nickel fell to RMB 121,800/mt, and Russian nickel prices also concentrated at RMB 118,200/mt. Downstream buying interest remained low despite spot prices continued to drop, with transactions still muted.

SMM Daily Review - 2012/6/7 Base Metals Market

SMM Insight 10:17:56AM Jun 08, 2012 Source:SMM

SHANGHAI, Jun. 8 (SMM) –

Copper
The most active SHFE copper contract for September delivery started RMB 380/mt higher at RMB 54,060/mt Thursday. The contract hovered narrowly between RMB 54,000-54,300/mt in the morning as longs and shorts competed severely, with a high at RMB 54,260/mt. However, as the Shanghai Composite Index lost 2,300 again in the afternoon, and as LME copper slipped swiftly to test USD 7,400/mt, SHFE 1209 copper contract moved lower gradually, retreating below the daily moving average. Reversing early gains, the most active copper contract finally ended at an intraday low of RMB 53,640/mt, down RMB 40/mt or 0.07%, with trading volumes and positions decreasing by 112,000 lots and 8,190 lots, respectively. The turnover rate for SHFE 1209 copper contract reached as high as 145% amid growing divergence between longs and shorts. SHFE copper prices found weak support at their 5-day moving average.

SHFE copper prices met resistance to rebound. Imported copper supply in spot markets continued to increase, keeping overall copper supply sufficient. Spot copper premiums were thus quoted between positive RMB 220-280/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,030-55,090/mt, and RMB 55,050-55,150/mt for high-quality copper. Traders chose opportunities to enter market in the morning, and some downstream producers also continued to buy at the lows. Near the midday, copper prices edged down, but spot copper market transactions were restricted. Transaction volumes on the spot copper market thus fell after initially rising. In the afternoon, SHFE copper prices slid rapidly by nearly RMB 400/mt, but actual consumption in spot markets was limited amid growing bearish sentiment, causing copper premium quotes to only rise marginally to positive RMB 240-320/mt. Nevertheless, traded prices dropped to RMB 54,750-55,050/mt in the afternoon, basically losing the RMB 55,000/mt point.  

Aluminum
The most active SHFE aluminum contract for September delivery started at the previous-day closing price of RMB 15,900/mt and slipped with other base metals to settle down a slight RMB 10/mt or 0.06% at RMB 15,890/mt on Thursday, after temporarily hitting the intraday high of RMB 15,960/mt. Positions dropped 334 lots to 100,742 lots. The Shanghai Composite Index lost the 2,300 mark, fostering a strong bearish market sentiment. The contract gradually slipped to fix the gap early in the week, indicating the downward trend will continue. SMM expects a struggle at RMB 15,900/mt in the near term.

Spot aluminum was traded at RMB 15,930-15,950/mt in Shanghai, with low-iron aluminum trading at RMB 16,020-16,040/mt. The current-month contract climbed slightly but spot market confidence was still weak. Downstream buying stayed limited while goods holders expressed high interest for goods movements, leading to wider discounts. Supply was still excessive and overall deals stayed light.

Lead
On Thursday, SHFE lead prices opened RMB 75/mt higher at RMB 15,120/mt and moved around RMB 15,105/mt since Chief of ECB and officials of the Fed expressed intention of adopting further stimulus policies. In the afternoon, SHFE lead prices were under downward pressures due to rally of the US dollar index but gained strong support at the 5-day moving average to close at RMB 15,030/mt. Trading volumes fell by 76 lots to 76 lots, while positions were up 14 lots to 2,142 lots.

On Thursday, although traders lowered prices, domestic lead market was quiet due to weak demand. Well-known brands such as Nanfang were initially quoted at RMB 15,160/mt, with premiums of RMB 50/mt over the most active SHFE lead price. Later, quotations fell by RMB 10/mt. Hanjiang was quoted at RMB 15,120/mt, while offers for Shenqian was at RMB 15,020/mt.

Zinc
On Thursday, SHFE 1209 zinc contract prices opened higher at RMB 14,860/mt and fluctuated in a narrow band between RMB 20-30/mt. In the afternoon, SHFE 1209 zinc contract prices plunged to an intraday low at RMB 14,715/mt due to falling Shanghai Composite Index, and finally closed at RMB 14,720/mt, down RMB 55/mt. Trading volumes decreased by 16,292 lots to 85,590 lots, and total position decreased by 3,040 lots to 173,766 lots.

In domestic spot markets, discounts of #0 zinc against SHFE three-month zinc contract prices expanded to RMB 70-100/mt, with traded prices between RMB 14,750-14,760/mt. #1 zinc was quoted between RMB 14,710-14,740/mt. Spot prices remained unchanged at noon despite falling SHFE zinc prices. Smelters increased goods supply as zinc prices had been rising for two days, while downstream buying interest was low, keeping transactions modest.

Tin
On Thursday, China’s spot tin market was boosted by the rises in LME tin prices seen on Wednesday. Mainstream traded prices were between RMB 151,500-153,000/mt in Shanghai tin market. Transactions remained quiet with a few purchases made by downstream buyers. Main transactions for Nanshan, Yunxiang and Yunshan were made around RMB 151,500/mt, while Yunxi was mainly traded between RMB 152,000-153,000/mt. Demand in spot market was still sluggish and smelters sell goods in limited amounts.

Nickel
On Thursday, mainstream prices of Jinchuan nickel were between RMB 122,000-122,200/mt, while mainstream Russian nickel prices were between RMB 118,500-118,700/mt. In the midday, Russian nickel prices slid to RMB 118,200-118,500/mt, while Jinchuan nickel prices did not fluctuate significantly. Spot nickel prices continued to fall in the afternoon, dragged down by LME nickel prices. Mainstream prices of Jinchuan nickel fell to RMB 121,800/mt, and Russian nickel prices also concentrated at RMB 118,200/mt. Downstream buying interest remained low despite spot prices continued to drop, with transactions still muted.